Up to 40 percent of businesses fail following a natural or manmade disaster, according to statistics cited by the American Red Cross.

Even small or indirect disruptions – a key employee takes an extended leave, a supplier goes out of business – can affect a business’s ability to succeed. Ninety-four percent of small-business owners say a disaster could seriously disrupt their business within the next two years, the Red Cross said.

Locally, efforts are being made to encourage businesses to prepare for an emergency or disaster, known as business continuity.

The American Red Cross Dakotas Region is working this year to raise awareness of the nonprofit’s Ready Rating program, said Sarah Bundy, preparedness and recovery manager for the local Red Cross.

Ready Rating is a free program that assesses an organization’s preparedness through a self-guided questionnaire. The organization then receives a scorecard rating its readiness. Tools and resources to implement suggestions are also available.

Bundy has been speaking to local groups and businesses about the program.

“Ultimately, the goal is, we want to be out in front so it diminishes our interruption, our loss on the back end,” Bundy said.

“The hope is we continue the cycle,” she added. “You can take updated assessments as you move forward.”

Dave Rogness, Cass County emergency manager, said the idea of business continuity came to a head locally after Sept. 11, 2001. Financial institutions looked at the security and safety of their records.

“If something should happen to their facility, how would they be able to continue to operate, how would they protect their financial records?” Rogness said.

Flooding also prompted local businesses to consider their vulnerabilities.

“Generally, the plan a business would develop would incorporate any kind of business interruption,” Rogness said.

However, less attention has been paid locally to business continuity in the past few years, he said.

“A lot of businesses think insurance is all they need to do, that would take care of it,” Rogness said. “That product is only a small part of being able to recover.

“If their business operation is interrupted, a client will go look someplace else pretty quickly for another business that will provide that service or product.”

Carol Cwiak, who teaches business continuity at North Dakota State University, said the goal of preparing is to keep businesses, schools and organizations operational.

“Every time we have a business and organization operating, it’s helping the community in some shape or form,” such as through jobs, providing services or creating a tax base.

Cwiak said something as simple as an extended power outage can interfere with an organization’s critical function.

If plans aren’t in place to deal with that disruption, it can cause a ripple effect, including the loss of jobs or an economic downturn.

“There’s a whole list of fallout when any business is hit,” Cwiak said.

Each spring, Cwiak’s students work with area organizations to analyze their preparedness and make recommendations.

Cwiak said business continuity plans must first prepare for the safety and security of people – employees and customers – by educating, training and practicing emergency plans.

Next on the list is how to protect and secure facilities and assets.

The last piece, she said, is processes and functions. “That’s where it becomes a bit more complex. Every business is different.

“Are we backing ourselves up? What level of depth do we have for some of these functions we need to do every day?”

Rogness said some business continuity plans may include allowing employees to work remotely, keeping records off-site, and identifying alternate suppliers in the case of a supply chain interruption. The Red Cross and FEMA offer plan templates, he said. Some business associations offer templates more specific to that industry.

While it’s never possible to be 100 percent shored against disaster, Cwiak said far too few businesses have prepared to the level they should. It is a matter of making it a higher priority, she said.

“You just need to be in the mindset that we’re going to back up the functions and take care of our people and prepare our people to take care of themselves and customers,” she said. “It’s not a five-minute thing, a 10 hours thing, it’s an enduring commitment. It’s something that becomes part of your organization’s identity.”

Sherri Richards has worked for The Forum since 2002. She is the features and business editor, overseeing Variety, SheSays, Farmers' Forum, the daily Business pages and Saturday Business section. Have a comment to share about a story? Letters to the editor should include author’s name, address and phone number. Generally, letters should be no longer than 250 words. All letters are subject to editing. Send to letters@forumcomm.com